Sir Richard Branson has said he would accept a 'knee in the groin' from the boss of BA if Virgin Atlantic didn't exist in five years time, as he retained control of his brand in a deal that will see America's largest carrier take a 49% stake.

In the £224 million deal, Delta Air Lines bought the holding of Singapore Airlines, but with Virgin retaining the brand name and operating certificate.

Willie Walsh and Richard Branson have been locked in a war of words

Speculation in recent weeks suggested Delta's European partner Air France-KLM may buy part of Sir Richard's 51% stake, leaving the entrepreneur without majority control of the airline.

This sparked a war of words between Sir Richard and Willie Walsh, the chief executive of BA owner IAG, after he said the Virgin brand would vanish if US airline Delta succeeded in buying the 49% stake owned by Singapore Airlines.

Sir Richard said he was prepared to bet the BA boss £1 million that Virgin Atlantic will not disappear within five years.

Walsh responded to the bet proposal by saying that rather than the losing company giving the winner's staff £1 million, he wants the loser to receive a knee in the groin.

He added: "It seems a very painful and foolish thing for Willie Walsh to propose; but I would be happy to accept. We've got used to BA hitting below the belt over the years, but I'm confident it would be the other way around on this occasion."

He also said the losing airline should also donate £1 million to a charity of the winner's choice "to ensure some good comes out of this bit of fun."

Sir Richard said the airline would retain its "independent spirit" and added that the deal signalled the start of "an era of expansion, financial growth and many opportunities for our customers and our business."

Virgin Atlantic said the new deal would allow them to offer a greatly expanded network from London's Heathrow Airport, where landing slots are scarce.

It will see a combined nine daily round trip flights from the airport to New York, and a total of 23 round trip flights between the UK and North America.

Virgin, which has its headquarters at Gatwick Airport, has a fleet of 40 aircraft and flies around six million passengers a year to long-haul destinations. It posted a pre-tax loss of £80 million in the 12 months to the end of February.

Delta chief executive Richard Anderson said: "Our new partnership with Virgin Atlantic will strengthen both airlines and provide a more effective competitor between North America and the UK, particularly on the New York-London route, which is the largest airline route between the US and Europe."